As of the end of August, 11 mainland carriers were operating 366 Airbus aircraft with 377 still on order. Coping with a growing customer base and providing timely, efficient support and service to Chinese airlines will decide whether aircraft manufacturers such as Airbus can continue their success in China.
Airbus has a network of spares and support centers in Beijing, Frankfurt, Hamburg, Singapore and Washington, DC. It has a spares warehouse valued at more than $30 million in Beijing and contracted another one in Shanghai last year.
Pierre Steffen, Airbus China vice-president for customer services, talks to China Daily about his new plan to better serve Chinese airlines and the potential of China to grow into a regional hub for customer service.
Q: During last year's Zhuhai Air Show, you said you planned to add something new to the logistics of spare parts supply in China. Could you elaborate on that plan and how it is going on?
A: We are selecting a professional logistics company, an international company with very strong foothold in China, to transport spare parts for Chinese airlines. Usually airlines transport spare parts themselves, which, I believe, is not the best solution.
Globally speaking, a lot of time is wasted during spare parts transportation. Airlines are forced to have a very high level of spare parts because they need to have enough spare parts to counterbalance the negative effects of the long transportation chain. That increases airlines' costs.
With this service, we are able to cut down transportation and transition time, which has a direct positive effect on cutting inventory.
Q: Have you used this service in other countries?
A: The service was developed at our spares support and service headquarters in Germany five years ago. We have introduced this service in Europe, the US and Asia. Now we have 40 airlines using the service globally, including Lufthansa, Singapore Airlines and Austrian Airlines.
Q: Do Chinese airlines welcome this service? What are their concerns?
A: I have solid commitments from senior managers of three Chinese airlines which wish to use the service very soon.
They have the same concerns as other airlines around the world. Most airlines want to take care of their own transportation. They think: 'We are a transporter. So we handle our own spare parts.' But in reality, a lot of time is wasted.
Q: Airbus has a large support center in Beijing and there are already about 25,000 parts stored here. Is it possible for you to turn this support center into a regional hub that serves the whole Asian market?
A: We are working on that. But of course such plans develop step by step.
In fact, over the past 12 years, our hub in Beijing has developed great competences, particularly with the increasing number of Chinese staff. For three years now, some of our experts have been traveling outside China to regions such as Myanmar, Vietnam, Siberia, Indonesia and Cambodia (to serve local customers).
The reason is quite simple. To fly to any Asian country from Europe, it takes at least two travel days, in and out. Then you need to adapt to the time zone and to the climate. And you are still not in the customer's office.
But our guys get into the plane and are in any of the Asian capital cities in six hours. They can start with an evening briefing with the customer. The travel is cheaper and less time is lost.
Q: Which kind of airlines are your experts serving?
A: We are not talking about airlines such as Cathay Pacific or Singapore Airlines, which have a lot of their own capabilities. We are talking about airlines that have the same background as our Chinese start-up airlines. Some of them are beginners. They have limited infrastructure and possibly other constraints.
So to answer your previous question, yes we are already in the regional business. We will gradually further increase our presence in the region, concentrating on support services that make sense regionally speaking.
Q: Are these traveling experts expatriates or Chinese?
A: Chinese. I do not have many expats anymore in my organization. This year alone I have replaced three expatriates for three Chinese, one to one. We are not doing any compromising. We select the right talent in the market.
We are proud that our staff attrition rate for local employees is below 4 percent. It's far below the industry level.
(China Daily September 26, 2007)
